Section 1
SECTION 1. Paragraph (1) of Section 6 of Republic Act No. 1828, as amended, is hereby further amended to read as follows. (1) The operator shall be paid for services rendered and expenditures incurred beginning with end of the first year after the effective date of the contract the sum of one peso (P1.00) per year, and the operator shall receive by way of additional compensation, an amount equivalent to a portion of the gross annual receipts, from all minerals, mineral and metal products, and by-products resulting from the operation, processing, and disposition thereof computed such that the Government shall retain not less than three and one-half per centum of the gross annual receipts, f.o.b. point of exports: Provided, that the operator shall until December 31,1988, be exempt from all taxes, duties, fees and charges, both national and local, directly payable it for any work or activity, equipment, machinery, materials, instruments, supplies, accessories, structures, buildings, lands, improvements and/or other properties directly connected with or needed and to be used or being used exclusively in the operation other than those provided in this Act and exempt those fees and charges that are imposed for work or services actually rendered to the operator: Provided, however, that the operator shall put the area or areas covered by the contract into actual production within five years from the effective date of the contract. Thereafter, penalties may be applied against the operator for failure to effect such production, and/or reach levels of production within specific time period, as may be agreed upon: And provided, further, that exemptions from taxes shall not extend to taxes due from contractor’s personnel in their personal capabilities.